On 24 September 2020, Indonesian Ministry of Finance has published the Regulation No. 130/PMK.010/2020 regarding the tax holiday (exemption) incentive for pioneer industries. The new regulation updates and replaces the Regulation No. 150/PMK.010/2018 which was issued on 27 November 2018. Most the provisions of new regulation are largely same as PMK-150, although certain other conditions have been amended.
- A minimum investment of IDR 100 billion being engaged in a pioneer industry.
- Committed to start realising the investment plan at the latest one year after the issuance of the Tax Holiday approval.
- One of the key changes in PMK-130 is the clarification of the application process where the applicant can make a self-assessment to justify why they should be considered as a pioneer industry
- If a taxpayer fails to do so in a timely manner (within 30 days of yearend), the Directorate General of Taxes (DGT) will issue a warning letter and this may eventually lead to a tax audit
- Tax Holiday proposals from OSS system to the MoF under PMK-130 may only be submitted up to four years after the effective date of PMK-130, i.e. until 8 October 2024.
- Taxpayer already granted a Tax Holiday based on the “old” MoF regulations can continue to use the existing facility until the end of the facility period.
The new regulation is effective from 9 October 2020.
